As per Section 2(12A) of the Income Tax Act, 1961, unless the context otherwise requires, the term ‘Books or Books of Account’ has the following Meaning/ Definition:
Section 2(12A) of the Income Tax Act, 1961
“Books or Books of Account” includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or in a floppy, disc, tape or any other form of electro-magnetic data storage device.
Books of account are required to be maintained by all the assessees carrying on business or profession, including individuals, HUFs, firms, companies, etc., except in the cases where they have opted for presumptive taxation.
As per IT Rule 6, the books of account must record all financial transactions, such as income and expenditure, purchases and sales, investments, advances, loans, payments/ receipts in cash or through bank account, any adjustments, etc. which are related to the business or profession.
Assessees carrying business/ profession are required to maintain accurate and up-to-date books of account for the purpose of preparing financial statements so that the same can help in filing returns, calculating taxes, and complying with the IT rules. Proper books of account also helps in meeting with the statutory requirement of audit, if any, as well.